Effect of Portfolio Management on Performance of Mutual Funds in Kenya

H.K. Isabwa¹

Section:Research Paper, Product Type: Journal-Paper
Vol.9 , Issue.6 , pp.19-25, Jun-2023

Online published on Jun 30, 2023

Copyright © H.K. Isabwa . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
Portfolio management is a precursor for the investment process to be a success. It not only helps investors have a deeper understanding on how to minimize investment risks but it equips them with the knowledge to maximize returns. Mutual funds usually specialize in investment management; however, little is known about portfolio management and performance of mutual funds after post-Covid-19 era in Kenya. The purpose of this study was to determine the effect of portfolio management on performance of Mutual Funds in Kenya. The study adopted ex-post facto research design and positivism research philosophy. The study targeted 14 respondents drawn from 4 mutual funds which include; Cytonn Money Market Fund, CIC Money Market, Zimele Market Fund and Britam Money Market Fund. The study adopted both primary data and secondary data. Primary data was collected using questionnaires while secondary data was collected using secondary data collection sheet. Data collected was analyzed using both descriptive statistics and inferential statistics. The descriptive statistics adopted included percentages, frequencies, mean and standard deviation. Inferential statistics adopted included; correlation analysis and regression analysis. Correlation results revealed that portfolio management has a significant strong positive relationship with performance of mutual funds of (r = 0.728, p-value < 0.05). Regression results revealed that portfolio management has a positive and significant effect on performance of mutual funds of (?=0.353, p < 0.05). The study concluded that portfolio management enhances the performance of mutual funds. Performance of mutual funds is affected when mutual funds invest in short to medium term high-risk investments. Short selling overvalued stocks affects performance of mutual funds. The study recommended that mutual funds should only adopt portfolio management approaches that enhance the performance of mutual funds.

Key-Words / Index Term :
Portfolio Management, Performance, Mutual Funds, Kenya

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